OTCQX:CNXXF - Post by User
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Benedictuson Sep 09, 2018 4:05pm
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Post# 28586977
some questioins for Cannex longs
some questioins for Cannex longsI've been doing some early dd into Cannex this afternoon and it's generated a few thoughts/questions open to the board for discussion/feedback:
I really like the company's approach of buying market leaders outright and infusing capital and expertise into quickly growing the top and bottom line of an already successful brand (very similar to crz). However, the share structure gives me pause.
Per the August 2018 presentation, the fully diluted share count is 235M shares. I know in the cannabis sector that's not uncommon; however, that is a lot of shares for a company who's ceo is still aggressively seeking additional targets in other states and will be paying for those assets with additional dilution.
Does anyone have any sales info for Jetty? I saw one analyst say something about this acquisition adding 40% to sales, so that made me assume Jetty made around 10M last year (40% * 27M for 2017 Brightleaf sales). This number seems very low for a high margin and successful extraction business in CA servicing hundreds of dispensaries, so if anyone can offer insights on this I'd be grateful.
From a valuation standpoint, assuming they close Jetty and my sales numbers are right, I'm conservatively estimating the company will exit 2018 with around a 55 - 60M US annual run rate (40 - 45M for Brightleaf (60% growth over 2017) and 10 - 15M for Jetty. So, the forward PSR is around 2, which is quite compelling considering these are successful brands with excellent growth potential.
As i said, I'm still evaluating this company as a potential investment and would appreciate hearing from anyone here who might have some thoughts on some of these aforementioned points or other info you believe is worthwhile knowledge. Much appreciated!
https://www.cannexcapital.com/files/file/5b6d1505bd8dd/CANNEX-Corporate-Presentation-AUG.pdf